One of Ridley Scott's most exclaimed science fiction movies is Alien. It's also one of the few movies that does not have a city scape. When involved in the re-release in 2003 he started to want to direct another Alien movie. It's states on his wiki though that he wasn't happy with the Director's Cut because he found the original pretty flawless. So why would he make a prequel then?

The film began development in the early 2000s as a fifth entry in the
Alien franchise, with both Scott and director James Cameron developing
ideas for a film that would serve as a prequel to Scott's 1979 science
fiction horror film Alien. By 2003, the project was sidelined by the
development of Alien vs. Predator, and remained dormant until 2009
when Scott again showed interest. A script by Spaihts acted as a
prequel to the events of the Alien films, but Scott opted for a
different direction to avoid repeating cues from those films. In late
2010, he brought Lindelof onto the project to rewrite Spaihts' script,
and together they developed a separate story that precedes the story
of Alien but is not directly connected to that franchise. According to
Scott, though the film shares "strands of Alien's DNA, so to speak",
and takes place in the same universe, Prometheus will explore its own
mythology and ideas.

io9.com/5916601/… according to the writer in speaking on the changes he made to the script that was basically a Alien prequel ""Where did that thing come from? It's not really a practical organism if it needs a human to gestate. Was it invented by someone?" The fact that that was precisely the story that Ridley wanted to tell felt like harmonic convergence, and we just sort of ran with it." So is it not set in the same world as Alien?
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Kevin HowellJun 8 '12 at 20:25

@KevinHowell you're somewhat misreading it. he's basically saying that the storyline of prometheus is to server us up a sort of origin story for the xenomorphs
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DForck42Jun 8 '12 at 20:31

@DForck42 Doesn't that still make it a prequel though? It precedes Aliens and is not directly connected but it is in the same universe and I know it has the dead giant in it.
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Kevin HowellJun 8 '12 at 20:38

@KevinHowell - The dead Space Jockey from Alien does not appear in Prometheus. The movies take place on different planets: LV-426 vs. LV-223.
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David HarknessJun 21 '12 at 22:46